Service Redundancy - 5 Lessons from the Nirvanix blowout
Earlier last week one of the most prominent Cloud Storage Providers Nirvanix, gave a shocker to the tech community when it announced that it will be going out of business. Customers and partners were asked to stop replicating data to their storage infrastructure immediately and move out their data in about 2 weeks. I have been fascinated about this story and here are the facts.
- Nirvanix pulled about $70 Mn in venture funding during its lifetime- starting Sept of 2007
- It's key backers kept up 5 rounds of funding right upto May of 2012
- Rated well by industry analysts and media
- The cloud storage service was sold through several enterprise software resellers and service providers.
- The service pulled in several key customers and was challenging the likes of Amazon's AWS S3 storage services.
What is evident is that the company was burning cash faster than generating revenues and it all came to an abrupt end, when it could not find any buyers/execute an exit strategy. One would have thought that enough value (IP or otherwise) would be generated to a potential buyer in 6 yrs of existence, but no more detail seems available. Nirvanix is by no means the first to go belly up- EMC had pulled the plug on Atmos Online service in 2010, though that was perceived as far smaller in impact.
From the enterprise standpoint, if an organization had been using their services, these 2 weeks are a time for scramble. Moving data out of the cloud is one tall order. Second issue is to find a new home for the data. And what if the data was being used in real time as the back end of some application. More trouble and pain. So here's my take on the top 5 areas clients/providers can address for Service Redundancy (leaning more on Cloud storage services)
1) Architect multiple paths into the cloud- Have a redundant storage path into the cloud. Ie host data within 2 clouds at once. Now this depends also on the app that is using the service, geo and users, a primary/ secondary configuration, communication links and costs. For eg- a client could have an architecture where the primary cloud storage was on Nirvanix and the secondary on AWS. Throw in the established value from traditional in-house options and established disaster recovery providers.
2) Be prepared to move data at a short notice- Based on the bandwidth available from source to target and the size of data in consideration, we can easily compute how much time it would take to move data out of a cloud. Add a factor of 50% efficiency (which could happen due to everyone trying to move data out), frequent testing and we have a realistic estimate of how long data migration will take. Now given that the 2 weeks from Nirvanix is a new benchmark, clients may choose to use this as a measure of how much data to store in one cloud- ie if it takes more than 2 weeks to move important data, then consider adding communications costs for better links or including a new provider into the mix.
3) Consume through a regular service provider - Utilize the Service through a regular managed services provider. This has two benefits for clients a) the ability to enter into an enterprise type contract with the provider and ensure service levels b) the ability to gain financially in case of breach of service levels. Of course service providers in turn have to be vigilant and ensure that they have proper flow down provisions in their contracts with cloud providers and secondly there is an alternative to the service in case of issues.
4) Establish a periodic service review process- Often we see the case of buy once and then forget. A regular review of the Service will often provide early warning of issues to come. For eg in the case of a cloud storage provider, tracking how much storage they are adding (new storage growth%) and new client labels signed on will give a good indication of any issues on the capacity front. This may in turn point to lack of available investment for growth.
5) Understand provider financials- Cloud providers today focus on ease of use and new gee-whiz features- this often masks how exactly they are doing financially. And the market continues to value them on revenue growth. It does not matter whether the company is public/ private but as a client and under confidentiality, there exists a right to understand the financial performance and product roadmap, even if it is as a high level.
Cloud Solutions offer multiple benefits, but at the end of the day, they still serve another business as a service and there are issues with all services- cloud based, or traditional. Was Nirvanix an outlier or the warning of things to come? We don't know that yet, but as service providers and clients, this may be the 'heads-up' we need, to stay focused on the essentials for effective transformation of Infrastructure and Storage Services.